Burying One&rsquo;s Head in the Sand with Risk

A recent client discussion reminds me of an article I came across a few years back with important implications for dealing with risk – or rather a risk that materializes into a major problem. The article, “What Organizations Don’t Want To Know Can Hurt,” focuses on events surrounding the College Board when it learned of extensive errors scoring its SAT tests, and provides a good example of not to do.

The company’s president reportedly said that finding the specific cause of the failure “did not really matter,” but rather what’s important is to ensure that improved controls catch future problems. His position was supported by the engagement leader of a consulting firm hired by the company, saying that dissecting past problems is not necessary either to ensure that the scoring system works better in the future or there is a good safety net to catch errors. He goes on, “You can do both without knowing whether it was rain that made the papers wet, or whether someone spilled a cup of coffee…[and] if we tried to brainstorm everything that could go wrong, we’d be here for years – for a lifetime. But if controls are in place to identify problems, and rescore tests that were misscored, that’s what you’re really looking for.”

These statements are fascinating – that there’s no need either to look back at why something went wrong because it’s unnecessary, or to dig deeply into what could go wrong because it would take too long. It suggests that problems in test scoring – which would certainly seem to be central to the company’s credibility and indeed its sustainability – are okay as long as they ultimately are found and test results rescored. Simply “catching future problems” by “rescoring tests” means that the company is satisfied detecting major problems with scoring after they occur, rather than taking steps to prevent such problems in the first place. I wonder what users of SAT scores think about that!

If you’re smiling at this you’ve got company. Cleary, looking neither backward nor forward is not a viable option. And, doing one or the other also is not the answer. Rather, it’s necessary to do both. Only by getting behind what went so wrong can management feel comfortable it understands what risks continue to exist, and only then is it positioned to look at what additional risks need to be the focus of its attention going forward.

It doesn’t take a genius to know that when a problem rears its ugly head it essential to find out why. The article talks about fields like aviation and medicine that conduct investigations to find out exactly what went wrong, to learn from often deadly mistakes and to improve processes and protocols. The National Transportation Safety Board does so focusing primarily not on casting blame but on making things better. Similarly, many hospitals hold mortality and morbidity conferences to analyze and learn from mistakes. Many businesses do that as well, learning from what went wrong. They don’t choose between learning from the past and working to make things better. They do both, with one supporting the other. And no, it doesn’t take “a lifetime” to find out what caused a major problem or to identify the source of the next potential disaster.

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